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Just when we were warming up to the idea…

…of buying a new Golf Sportwagen TDI. VW gets caught cheating on emissions tests.
A list: Ford C-Max Hybrid busted for cheating on mileage claims, no fine. GM fined $900 million for faulty ignition switch that killed 169 people. VW allegedly installed software that could tell the difference between road use and test stand programs. Consumers will get get less mileage in recalled and “fixed” cars. Emissions will accelerate the deaths of untold numbers of people by an infinitely small amount but burn more fuel which is the cause of the pollution in the first place. $18 billion fine, $37,500 per car.

Do you suppose if the vote to unionize VW in the USA had gone in favor of the union thugs things might be different?

EPA Accuses Volkswagen of Dodging Emissions Rules
No recall of auto maker’s cars is currently under way and agency says vehicles remain safe to drive
Volkswagen automobiles on display at the Frankfurt Motor Show on Sept. 16. The Environmental Protection Agency accused Volkswagen of using software to get around government emissions tests in violation of the Clean Air Act. ENLARGE
Volkswagen automobiles on display at the Frankfurt Motor Show on Sept. 16. The Environmental Protection Agency accused Volkswagen of using software to get around government emissions tests in violation of the Clean Air Act. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
By AMY HARDER and MIKE SPECTOR

The EPA, which on Friday unveiled the allegations with the California Air Resources Board, alleged the German auto maker used software in the cars to get around government emissions tests. EPA officials said the software, dubbed a “defeat device,” made about 482,000 Volkswagen diesel-powered cars appear cleaner running than they were. The Clean Air Act requires vehicle manufacturers to disclose design information to receive certification that their products meet federal air-pollution standards.

An EPA spokeswoman said the agency will be developing protocols to more efficiently screen for defeat devices.

U.S. officials said Volkswagen violated two parts of the federal Clean Air Act and could face sizable financial penalties of up to $37,500 per car, or more than $18 billion. It remained unclear whether the government would seek such an onerous penalty. The EPA in November 2014 hit South Korean auto makers Hyundai Motor Co. and Kia Motors Corp. with a record $100 million penalty for overstating fuel-economy claims and forced the companies to cough up another $200 million in regulatory credits.

No recall of the Volkswagen cars is currently under way and the agency said the vehicles remain safe and legal to drive. Volkswagen could have to recall the cars and fix them, officials said, though that could take up to a year. The EPA is working with the Justice Department and an investigation is continuing.

The auto maker, Europe’s largest by sales, said in a statement it “is cooperating with the investigation” but declined further comment.

Officials alleged Volkswagen used software that activates full emissions controls only during testing but then reduces their effectiveness during normal driving. The result is the cars can emit nitrogen oxides at up to 40 times the allowable standard, the agency said. Diesel-powered cars are a small part of overall U.S. car and light-truck sales.

“Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” said Cynthia Giles, assistant administrator for the agency’s enforcement group. She later added: “These violations are very serious. We expected better from VW.”

Volkswagen’s apparent motivations for fooling the emissions tests were unclear. An EPA spokeswoman said it would be “premature to speculate on why VW did this.”

The cars include so-called clean-diesel vehicles marketed for impressive fuel economy without sacrificing driving performance. These cars have been a centerpiece of Volkswagen’s U.S. marketing efforts.

They include the Audi A3 and Volkswagen Jetta, Beetle, Golf and Passat with model years between 2009 and 2015. The vehicles have been sold in the U.S. since 2008.

California is separately probing the auto maker.

The most well-known defeat-device case dates back to the late 1990s. The EPA and seven diesel-engine manufacturers, including Caterpillar Inc., Detroit Diesel and Cummins Inc., announced in 1998 a collective $1 billion settlement to resolve Clean Air Act violations similar to those the EPA alleged on Friday. Those companies faced $83.4 million of penalties under the law, at the time the largest U.S. environmental enforcement action in history.

The International Council on Clean Transportation, a nonprofit research organization that works with governments to cut air pollution from mobile sources, and West Virginia University researchers uncovered Volkswagen’s alleged use of defeat devices in research and testing over the last couple of years.

Drew Kodjak, executive director of the organization, said he doesn’t know of any other auto makers using such devices, but advances in technology may make it easier to use the software.

“Now that vehicles have electronic controls and are far more computerized than in the past, it is certainly possible that manufacturers can take advantage of this by installing defeat devices into their vehicles,” Mr. Kodjak said.

The publicized allegations against Volkswagen come amid an expansive push by the Obama administration to curb air pollution from an array of sources, including power plants, trucks and oil and natural-gas drilling. In August, President Barack Obama announced an EPA rule forcing power plants to cut carbon emissions. Earlier this summer, the EPA set new carbon rules for big trucks.

For auto makers, the EPA has coming emissions standards that require them to sell light vehicles averaging 54.5 miles a gallon by 2025.

Matt DeLorenzo, a managing editor at automotive information supplier Kelley Blue Book’s KBB.com, said the EPA’s allegations could hinder auto makers’ efforts to the fuel-economy regulations, since diesels deliver mileage gains without the expense of electric motors and battery packs found on hybrids.

“From an industry perspective it may set back diesel technology as a means for auto makers to reach the requirements for high fuel economy,” he said.

Auto makers are seizing on a coming 2017 review of the standards with regulators, including the National Highway Traffic Safety Administration, in the hopes of relaxing some requirements.

Falling gasoline prices have buyers flocking to gas-guzzling pickup trucks and sport-utility vehicles and are calling into question whether car makers can meet the emissions and fuel-economy targets. Regulators so far have indicated they are reluctant to budge.

The scrutiny over emissions regulations adds to a broader unprecedented government pressuring of auto makers, including for safety transgressions. General Motors Co. admitted to criminal wrongdoing and agreed to pay a $900 million penalty in the mishandling of a defective ignition switch linked to more than 100 deaths in a settlement with the Justice Department unveiled Thursday.

The Justice Department also is probing safety-equipment maker Takata Corp. of Japan over rupture-prone air bags linked to eight deaths and more than 100 injuries that have forced auto makers to recall more than 19 million vehicles, among the largest such actions in history. Regulators, too, have been hitting auto makers with fines for safety lapses.

The emissions allegations come as Volkswagen already faces tough challenges in the U.S. Analysts say Volkswagen’s key U.S. vehicles are too expensive and out of step with consumer tastes. The brand’s sales are off 2.8% through August compared with the same period a year earlier even as the wider market is sizzling. Industrywide sales are expected to eclipse 17 million light vehicles for the first time since 2001.

In recent years, Volkswagen has fallen behind auto makers it traditionally led in the U.S., including Fuji Heavy Industries Ltd.’s Subaru brand. The German auto maker spends among the highest amount of money on sales incentives per vehicle sold, according to researcher Autodata Corp.

Volkswagen has been planning to unveil new products in coming years to stem share losses. On Monday, Volkswagen officials were planning to host media in New York for a Passat launch celebration. It is unclear now whether executives will keep those plans.

—John D. Stoll contributed to this article.

Write to Amy Harder at amy.harder@wsj.com and Mike Spector at mike.spector@wsj.com